Written by

John Ferro

Poughkeepsie Journal

SALE HEARING

The public hearing about the sale of Saint Francis Hospital to a bidder is scheduled for 11 a.m. Tuesday at the U.S. Bankruptcy Court in Poughkeepsie. Check poughkeepsiejournal.com for updates throughout the day.

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If Westchester Medical Center completes its acquisition of Saint Francis Hospital, the resulting entity may look a lot like what employees and patients currently find when they pull up to Saint Francis’ doors off of North Road in Poughkeepsie.

Whether the Valhalla-based medical center takes over Saint Francis still depends on final approvals from federal bankruptcy court and regulators.

But in court documents and through interviews with industry experts and executives, a picture emerges of how the two institutions could come together.

One thing is clear: Saint Francis expressed preference for Westchester Medical’s bid in large part because it would preserve services where they are and allow for some local control.

Both institutions, in deference to the ongoing bankruptcy case, declined to comment on how the merger would unfold.

Furthermore, it would preserve pre-school and early intervention services.

“This pledge,” Saint Francis said in its court documents, “has a tremendous benefit to the Dutchess County community as it will ensure the continuity of services at the Saint Francis campus with minimal disruption.”

The court documents indicate that Westchester Medical also will add services, although it does not say what they are.

That was the case in 2000, when Westchester Medical acquired Ellenville Community Hospital and renamed it Ellenville Regional Hospital.

Westchester Medical added surgical, orthopedic and diabetic services. It improved emergency room services by bringing in some of its own staff.

It provided data-sharing technologies to link the two hospitals that are some 75 miles apart.

Ellenville President and CEO Steven Kelley, who joined Ellenville in 2003 two years before Westchester Medical dissolved the partnership, said the additions may not have been the right fit for a small, rural hospital.

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“I think that the market here is just different than Westchester,” Kelley said. “You get some big-name person and people are not flocking in because of that because they never even heard of them.”

The situation is Poughkeepsie is different, however, in part because many of the two hospitals’ services are already aligned. In its court documents, Saint Francis points out Westchester Medical also provides mental health and trauma services.

In this capacity, Saint Francis and its affiliated institutions would retain final legal authority of business and clinical matters. But under a separate management services agreement, Westchester Medical would manage day-to-day operations through the closing date.

Those functions would include:

• Operational planning.

• Purchasing and maintaining equipment and facilities.

• Marketing.

• Information technology, including maintenance and improvement of billing systems.

• Facilities upkeep and repair.

• Negotiating, executing and complying with contracts.

• Staffing, supervision and management.

• Financial and accounting services.

• Reporting and record-keeping.

Saint Francis said the arrangement would be “essential in turning the business office operations around” and thereby reduce the “cash burn” until the closing.

The hospital fell into bankruptcy, in part, because of a failed implementation of a new computerized billing system.

Saint Francis lost tens of millions of dollars in reimbursements because medical claims, both to private insurers and Medicaid, were not processed within required time frames.

In response to a Poughkeepsie Journal inquiry, the state health department said the state denied 1,736 Medicaid claims totaling $1.2 million between October 2012 and June 2013 because they were submitted by Saint Francis beyond the 90-day window.

The court documents indicate Westchester Medical plans to hire the full complement of Saint Francis staff.

When Westchester Medical took over the Ellenville hospital, it established a new hospital entity. Employees were required to apply for the jobs they had held previously.

The two hospitals have no union overlap. About 80 percent of Westchester Medical’s 3,300 employees are represented by either the Civil Service Employees Association, the New York State Nurses Association or the Committee of Interns and Residents.

Saint Francis has more than 700 nursing, service, maintenance, business office and clerical workers represented by 1199 SEIU United Healthcare Workers East. Most of them organized just last year and do not have a contract yet. Maintenance workers are operating under an expired contract.

A spokeswoman for 1199 said the union is looking forward to sitting down at the bargaining table.

“There has been a lot of uncertainty for the workers there and at this point, we welcome the stability,” spokeswoman Mindy Berman said. “The end of the (bankruptcy) process is a beginning.”